Opposition Brief — J. E. Schecter Corp. v. Carrier Corp.

Office-Supreme Court, U.S. 2

eifeweme COMB Lb By | SEP 14 1866

| | | JOHN F. DAVIS, CLERK

Supreme Court of the United States

OCTOBER TERM, 1965

A.

vv

No. 463

IN THE MATTER =

of .

J..E. SCHECTER CORPORATION,

nara Petitioner,

and

CARRIER CORPORATION, AMERICAN: RADIATOR &

STANDARD SANITARY CORPORATION, SARCO COM- ” ae

PANY, INC. and SARCOTHERM CONTROLS, ing

Respondents.

7%

On PETITION FOR A WRIT oF CERTIORARI TO THE UNITED STATES -

Court OF APPEALS FOR THE SECOND CIRCUIT

BRIEF FOR RESPONDENTS IN OPPOSITION

Herman N. Scuwartz,

Attorney for Respondents, .

_120 Broadway,

New York, N. Y. 10005.

_ScHWARTZ, WEISSBERGER, LEICHTER & STORCH,

‘IRVING RONALD STORCH,

- ‘ Of Counsel. .

ACKERMAN PRESS, Phones BO 9-7107-8

x

.

TABLE OF CONTENTS

‘ PAGE

Opinions Below ..... Cekav Citak biastaniaaeen 1

Natali icine deiccass Res AMI EC 2

Statutes Involved poet tare gebaesaneweuns 2

Questions Presented for HevieW ....00..00- eases oon

Statement of the Case .........0..seeceees Be a 4

ARGUMENT: :

I—There is no basis for granting certiorari ....... 7

- A. Solely State-created rights are involved and

Erie v. Tompkins has no applicability ....... 7

B. There are no matters of federal semana to

DO CORNIINNES «0c cc ccevescdpeedsvadoeessacess ' 9

11—The decision below is clearly senveid —ceawwes coon

Cem «6.55 occsissacks Biases nehseeacekenetes 23

ip BPPOMGIE .nccccccovcccccccccsccresscccececcccces 24

li TABLE OF CONTENTS

Caszs Crrep_ |

; PAGE

Albert Pick Co. v. iii 6 F. Supp. 486 = D. N.Y.

ah rg al 3 wes 8 , 19, 20

Aquilino v. U.S. A., “ey 10 N. Y. 24 271, ee 19

Aquilino v. U.S. A., et al., 363 U. S. 509, 80S. Ct.1277 11

- Babbitt v. wv Trust Co., 72 N. J. Eq. 745, = A.

TT OMRMaeee Tse sae eek heas i nke seeks sone ies 10

Berry v. Root, 5 Cir, 148 F. 2a 945, cért. den. 326

la Con Gada ds LCE hab ae xe ve dete 'on 6e 10

Clews v. J amieson, 182 U.S. 461 (1901) Ca, «21

Erie v. Tompkins, 304 U.S. 64, 58 S. ty 817, 82 Mm

era aoe yi tb eh ies dvee 00.0% 3, 7,9

Estate of Liebman, 189 Mise. 282, 60 N. Y. S. od 482 |

(Surrogate’s Court, N. Y. County, 1945) :....:. °@

Filardo y. Foley Bros. Inc., 297 N. Y. 217 (1948),

cert. den. 336 U.S. 281 ...........-.eeeeeeee 8, 21, 23

Highway Construction Co. of Ohio v. City - Miami,

Fila. 5 Cir., 126 F. 20-777 «2.6. Pee eee ence ee -

Hiller & Skogland, Inc. v. Atlantic Creosoting Co.,

Inc., 40 N. J. 6, 20 n. 3, 190 A. —— a ,

—_ tieececcsccccesccccoess ae Pre 8, 9, 13, 18

ey SOR Sane 19

In re Kornder’s Estate, 168. Mise. 553, 6 N. Y. oa

ee ee ciceikcinrs’ 20.

Kirkpatrick v. Eastern Milling & Export Co., 135 F.

Ee Pee rr rere reer ere 11

Marceau v. Great Lakes Transit Corp., 2 Cir., 146 F.

IID a2 eeixctelxcres sete ecoh ss. tie

Maull v. Stokes, 31 Del. Ch. 188 5 198) Peres

TABLE OF CONTENTS iii

PAGE

Morris Picker v. City of ‘Bayonne, et al., 60 N. J.

NO, Fs civ nc cr evereusvtevetesnssecceysees 22

National Surety Corp. v. Barth, 11 N. J. 506 (1953) . . 8,22

Pearlman v. Reliance Insurance Company, 371 U. S.

132, 135 ...... late ae ae eh alien, 11

Plevy v. Schaedel, 44 N. J. Super. 450, 130 A. 2d 910

| (Superior Court, Law Division, 1957) :.....13, 14, 16,

<, 18, 19, 21

Public Saweice Commission v. Brashear Freight

Lines, Inc., 306 U. S. 204, 83 L. Ed. 608, reh.

_ den., 306 U. S. 669, 83 L. Ed. RPO ee il

Raymond Concrete Pile Co. v. Federation - Bank &

Trust Co., 288 N. Y. 452, 45 N. E. 2d 486, affd. sh

on rearg., 290 N. Y. a 48 N. EB. 2d 709 .....14,16,19

Samuel D. Wasserman, Ine. v: Klahre, 24 N. J. Super.

143, 93 A. 2d 638 (Superior Court, Appellate ea

Division, 1952) ...........8, 9, 13, 14, 15, 16, 18, 19, 21

Sprague v. Ticonic Bank, 307 U.S. 161, 167 one 10.

State v. Low, 18 N. J. 179 (1955) .......60+2eeee0e- Rs |

State v. Meinken, 10 N. J. 348 (1952) ........+-+++- a

Stulz-Sickles Co. v. Fiedburn Const: Corp. » 114N. -: |

ct le MII og eu Sans xasuans dp dbauwcesweas eevee 22

_ Trustees v. Greenough, 105 U, S. 527, 533 ase nue . 9,10

Wickes Boiler Co., Inc. v. Godfrey-Keeler, Inc., 2 Cir.,

116 F. 2d 842, mod. 121 F. 2d 415, cert. den. 314

a 2 erection cciloceusaceaaaseuees 8,19, 20,21 -

Wilson v. Robert A. Birgich, Inc., 44 UN. J. Super. zs

$8, 8B ..3.... Fa ial cn galt ang tadioeresives 22

Yoder, et, al. v. -Nu-Enamel Corporation, 8 Cir, -_ -

ms sf errr Orr i 9

iv : TABLE OF CONTENTS

PAGE

Title 11, Section 11, United States Code (Chapter 2

of Bankruptey WE 6 ks boc CGon ida sx sth kodes '.§

Title 11, Section 47c, United States Code ........... 2

Title 28, Section 1254(1) United _— ne 2

| New Jersey Statutes: ee A ‘

_ 2A:Preamble Pars. 7-8.........2..000. ee ears Q-

STO IR, BRRR EEN SrIy a Net 16, 17, 18

A 102-9. ....... See) een e a ere Nihoe ciee

RE ici ee eulantigo ds el

ceri ivginicgas cen 12, 16, 18

2A :102-12 ..... Neon Sect Nee DREN RN SE eT ny 16, 17,18

New York Statutes: ; , |

Section 70 et seq., Lien Law ..... Sat dee cane eu ceans 3

- Section 36a, Lien Law (Former Statute) ........... 8, 20

Aursoritres Crrep — |

Collier on- n- Bankruptey, Volume 4, pages 1210-1211 . 9

1 Pomeroy on Equity Jurisprudence, Section 158 ... 21

Weiner, 68 Harvard Law Review 20, 61 ..... Sore 23

Cyclopedia of Federal Provedure, Volume i, 67 :05,

tail MT akc ckeasweaceect jenawanes tee ceees -21

Sen ee ge ny

.

“Supreme Court of the United States

OCTOBER TERM, 1965

ee _ . No. 463

7%

—_

ee

_ J. BE. Sonecter Corporation, : oy

ae rar Petitioner,

. Carrier Corporétion, American Raptor & STANDARD

Sanrrary Corporation, Sanco Company, Ino. and —

SarcoTHERM Contsots, Inc., sen e

: Respondents.

,%

a

_ On Perrrion ror a Wait or CERTIORARI TO. THE UNITED

Srates Court or APPEALS FOR THE SECOND CigcuIrT

e .

. é. -

vv

BRIEF FOR RESPONDENTS IN OPPOSITION

Opinions Below

The opinion and order of the Referee in Bankruptcy

appear in the Appendix at pages 3la through 39a. The

opinion of the United States District Court for the East-

ern District of New York which upheld the decision of the

‘Referee in part, but remanded the matter to him for

further proceedings, is reported at 234 F. Supp. 474. The

opinion of the Court: of Appeals for the Second Circuit,

which reversed the decision of the District Court and dis-

2

missed the cross-appeal of the petitioner, is ‘reported at

347 F. 2d 153 and also appears with the judgment of the

Court of Appeals at pages. 2 through 34 of the ‘petition.

| Jurisdiction

The futimment of the Court of nani was entered on

: May 21, 1965. The petition’ for certiorari was filed on

August 17, 1965. Jurisdiction of this Court is invoked

“under 28. U. S. C. § 1254 (1). and Section 24c of the Bank-

ruptcy Act, 11 U.S. C. $ 47e. : *

« er,

Statutes Involved

Respondents find no fault with the citation by petitioner.

of the relevant New Jersey statutes, except that the cap-

tions are not completely accurate. Title 2A of the New

Jersey statutes is captioned: ‘‘Administration of Civil

and Criminal Justice.’’ Subtitle 6 thereunder is captioned

‘ ‘‘Specific Civil Actions,’’ and Subtitle 10 is captioned

———————

‘‘Crimes.’’ Lest undue emphasis be placed on captions ©

and cross-references, the Court’s attention is directed to

the Preamble to ‘Title 2A, paragraph 7 which provides:

‘‘The classification and arrangement of the several

sections of said Title 2A have been made for the pur-

pose of: convenience, reference and orderly arrange-

ment, and therefore no implication or presumption of

a legislative construction is to be drawn therefrom.”’

_ and to paragraph 8 which states: : | "

_° “Tn the construction of the said Title 2A... no out-

line or analysis of the contents of said title ¢ or of any

‘. subtitle . . . no cross-reference or cross-reference note

and no headnote or source note to any section of the

said Title 2A shall be deemed to ” a sede of the said

. Title. a9: *°. : : f

3.

On the trust fund issue, no federal statute is involved,

the Bankruptcy Court merely being the forum for deter-

mining rights to a fund in the Court’s actual or construc- |

tive possession. It is undisputed that local law is crucial

on that issue. ates see ;

The Bankruptcy Act is involved only by petitioner ’s

‘Argument’? on counsel fees, but not. by mention in

- / “Questions Presented For Review’’ or the ‘‘Statement of

the Case’. Petitioner contends that the Bankruptcy Act ° —

makes no provision for counsel fees-in. this case. Respond-

ents contend that insofar as the Bankruptcy Act vests the

Bankruptcy Court with equity powers, such power includes |

the traditional power to allow counsel fees when a fund

is created for the benefit of others. as

Chapter 2 of the Bankruptcy Act (11 U.S. C. $11) pro-

_ Vides: ee ae |

‘‘CreaTion or Courts oF BANKRUPTCY AND THER J URIS-

-picrion. (a) The. Courts of . . . bankruptcy . . .

are hereby invested . : . with such jurisdiction at law

and in equity as will enable them to exercise original

jurisdiction in proceedings under this act .. .”

The New York Lien Law, Section 70 éf seq. was involved

in the courts below and appears in part in the appendix

_ (9a), but for present purposes need not be repeated here.

Questions Presented for Review |

Should this Court exercise its sound judicial discretion

and grant certiorari when: ae

(a) The Court of Appeals has not decided an important

New Jersey question. in conflict with applicable New Jersey

law, but in fact is entirely in accord with it; and when |

(b) No federal issue is involved, although petitioner;

raises the Erte v. Tompkins doctrine so as to fall within this},

4

Court’ ‘s~ appellate jurisdictiod, notwithstanding that the

Court of Appeals clearly applied local law; and when

({c) The Court of Appeals 2eft unanswered alternative

grounds for relief. under New York and New Jersey stat-

utes by. granting relief under New Jersey ‘decisional law

and New Jersey as well as general — of acuta and

“justice; andl when

(d) The petitioner, on ‘the’ question of-counsel fees pay: —

able out of thé fund, is not an aggrieved party and there-

fore has no standing to appeal, and when, in any event,

the decision of the Court of Appéals on the issue of com-

pensation is in harmony .with decisions of this Court and

the New Jersey courts, and not in. conflict with any cited

. by the a

| Statement of the Coes

The facts appear in the opinion of the District Court in

detail and in the opinion of the Court of to the

extent necessary to frame the legal questions involved.

- Respondents cannot concur bist ry presentation

. a the case.

In January, 1961, William L. Crow Constrietion Com-

pany, a New York corporation, hereafter called Crow,

general contractor in the improvement of real property .

. owned by Princeton University, located in Princeton, New

Jersey, and known as the ‘‘Engineering Quadrangle’’, en-

tered into a subcontract with the petitioner, J. E. Schecter

Corporation, hereafter called Schecteror the debtor, to

provide all labor and materials for the plumbing, heat-

'. ing and air-conditioning work. The sub-contract provided

that ‘‘All matters relating to the validity, performance,

interpretation or construction. of the agreement or the

breach thereof shall be governed by the Law of the State

of New York” — af 37

5

ca

In September, 1962, Schecter wrote to Crow, setting N

- forth the names of forty-one subcontractors: and material-

men who had performed work for and/or supplied mate- .

rials to Schecter for the Princeton job, and to; whom’ |

Schecter was indebted, and requested Crow to pay the said ..

claimants from the balance due Schecter a sum on account

equal to 50% of the respective claims, but said sums were

never paid (16a).

On. November 27 » 1962, ‘fee filed a petition under.

Chapter XI of the Bankruptcy Act and‘an order was en-

tered. authorizing it to continue in possession of its assets,

to continue in business, staying all creditors from proceed-

ing with their claims, and referring the case to Referee ‘in

Bankruptcy, William J. Rudin.

In July, 1963, one-of the unpaid subcontractors, Johnson.

. Service ‘Company, moved before the Referee for an order

_permitting it to prosecute an action against the debtor on

behalf of itself and others similarly situated for an aceount-

ing of the trust funds derived from the Princeton project,

‘but Johnson did not proceed further with the motion

(27a-30a). Instead, Schecter filed a petition for an order

= compromising Schecter’s claim against Crow for $165,000,

compromising the claims of six creditors, including Johnson

"Service Company, agaitist the fund for approximately 30%

of their claims, with no mention of the fact that theré were

thirty-five other claimants and providing that the balance

‘be paid to Schecter and deposited in a depositary desig-

~ nated by the Court (18a). The order was signed by Referee

Rudin (11a), and the terms were thereupon carried out,

‘witha balance of $92,816.67 being paid over to Schecter

and being held in a special account in the debter’s name.

No notice of this proceeding was given to the thirty-five .

other creditors of the gener F Semeinipe from the Prince-

ton job.

Inf December, 1963, ¢ the ‘it ston on behalf of

‘themselves and others similarly situated, ‘petitioned the

ms

Referee to impress a trust under the laws of New J ersey ‘

and New York on said funds in the debtor’s possession and

__ for legal fees to be paid out of ‘id trust fund ‘(2a-18a).

- The Refereé denied the petition’ and Judge Rayfiel up-—

_ held him on the grounds that no trust could be impressed |

under New York law since its Lien Law only applied to

an improvement of real property located in the State of

' New York and that the“intent of Crow and Schecter to —

_. have New York law apply must bow: to the more signifi-

' cant contacts in New Jersey, and that the New Jersey

\statute-was criminal in scope and provided no civil remedy

‘for a ‘‘diversion”’ of funds received by a contractor for a

_ New Jersey improvement. The District Court, however,

remanded the matter to the Referee for the purpose of

_ directing the debtor to-proceed with an appropriate motion .

to recover the funds paid to the six creditors (47a).

The Court of Appeals reversed the District Court and

’ impressed a trust on the funds in the debtor’s possession

-. derived from the Princeton project on equitable principles

as enunciated in New Jersey cases, and allowed. counsel

fees out of said fund, remanding the-matterto the District

Court: for further préceedings ‘in accordance with the

opinion. ‘The Court of Appeals also denied the cross-appeal

_of the petitioner for the reason that the return of the

monies paid to six crediters was mooted by the impressing ,

of a trust. ‘: bse Be deiniatied bi 7

. After remand, respondents obtained an order signed by

Referee Rudin dated July 29, 1965, a copy of which is set’ ..

forth in the Appendix (24), which details the steps to

be taken in order ‘to implement, the decision of the-Court

of Appeals. . . - awe TRAE: Bae sy

. . The Court of Appeals, in respondents’ view, did not defi- .

-nitely rule out the applicability of New York law or a

remedy baséd solely on the New Jersey statute, but found

it unnecessary to determine those questions as.it izapressed

a trust on other grounds. While respondents rely primarily ©

' :

7 - y

' on New Jersey law inasmuch as ‘the improvement was

located in New Jersey, they take the position that if the

New Jersey statutory or decisional laws do not afford ‘re-

lief, respondents can look to New York law. alternatively

as a third-party beneficiary of the contractual provision

which sought to apply New York law.

.. Respondents do not seek. an allowance for counsel fees

- over and beyond the amounts due the unpaid claimants,

but only seek it from those participants in the trust fund

to be paid out of: their recovery. Respondents. fail to see

how petitioner is affected by.this part of the Court of’

Appeals’ decision. In any event, the only question would.

be the power of the bankruptcy court to allow counsel fees

‘in this type of case, and this Court has. already passed

affirmatively on that issue, and the cases cited by the peti-

tioner are not in conflict’ with the decisions of. this Court

ofr the decision of the Court of Appeals. |

Upon the undisputed facts and the applicable New Jer-

sey law, the decision ' of the Court below was absolutely

correct.

+ °

____ ARGUMENT-

: =

There i is no basis for granting certiorari...

A. Solely State<rented tights are tnvelved and. me “

Erie v. deca uplenresncerpies ‘* :

The existende ofa trust fund is strictly a question of

— local law and both petitioner and respondents have adopted

this view. The subsidiary question of which ‘local: law

to apply is not before this Court, as the Court of Appeals

granted relief under New Jersey law, the choice of the .

petitioner andaccepted by respondents as their primary

basis for relief. The only — therefore, insofar as

Rete x, Tompbige (204 U. & on Ct. S17, 82 1. Ea.

s

“@

| 1188), is sominaniaiidy A is whether the Coart of Appeals ap-

= — law, and not whether they applied it correctly;

‘Theo Opinion of the Court of Appeals could not be any

> jai It relied mainly on the following for its decision:

(1) An éxpression. by the highest. court of New Jersey in.

‘the recent case of Hiller '& Skogland, Inc. v. Atlanti¢

Creosoting Co., Inc., 40 N. J. 6, 20 n. 3, 190 A. 2d 380, 388,

n. 3 (1963) citing with: approval a decision of the Superior _

Court, Appellate Division of the State of New Jersey,

Samuel D. Wasserman, Inc. v. Klahre, 24'‘N: J. Super. 143.4

93 A. 2d 638, which said that if there were’ a violation of

the private improvement statute, the Court would give :

‘‘whatever civil remedy might be“appropriate to the cir-

' @umstances under the general principles of law and equity’’.

(2). Holdings in several New Jersey cases wherein trusts

were impressed, not directly under the statutes there in-

volved, but under general equitable principles. National

: Surety Corp. v. Barth, 11 N. J. 506 us) and other cases

cited ‘in the opinion. |

The Court of Appeals also cited a tadeesd | case in New

“York involving a similar statute, former Section 36a of

=———~the New York Lien Law, which was deemed to be a crimi-

nal statute, but where the Court nevertheless impressed

a trust. Wickes Boiler Co. Inc. v. Godfrey-Keeler, Inc.,

2 Cir., 116 F. 2d 842, mod. 121 F. 2d 415, cert. den. 314

U. 8. "686, and. another casé of far-reaching importance, -

Filardo v. Foley Bros. Inc., 297 N. Y. 217, cert. den. 336.

U. S. 281 (1948), where: the New ‘York Court of es

a

ee ees

i

BSE

5 ee or ore ON a ON,

if plaintiff may not sue to enforce it, the benefits ac- —

corded would indeed. be empty and illusory. He would.

fiid himself in ‘the position of having been given a

1 gs ane Nip ales dad na Siar ee

/_ to enforee.” ies

t

9

_ The petitioner, on the other hand, does not even mention —

_ or cite the Hiller é Skogland case, supra, which is rather

astonishing when considered in the light of its contention -.

. that the Court of Appeals, did ‘not apply New J ersey law.

The petitioner also makes no attempt to explain the

vitally important statement made by the Appellate Court

in the. Wasserman case, as quoted in the Court of Appeals’

opinion—which is the crux of this’ case. Thus, the peti-

‘tioner has ignored the very same criteria set forth in 4°

case it cited on pages 10-11 of its petition, Yoder et al. v..

Nu-Enamel Corporation, 8 Cir. 117 F. 2d ree

‘The ‘Court’ of Appeals decided that ‘New J ersey “law.

applied and granted relief unanimously on.equitable prin-

ciples as enunciated. by the authoritative New Jersey cases

cited in its opinion, and certiorari on the grounds that

Erie v. sana cose! has been asia should therefore be

denied.

“There j is: Jno conflict among the circuits on - the issue

presented, and no cases are cited in the petition to demon-

strate any conflict. There. is no important question of -

federal law which: has not been, or should. be settled by ~

this Court.. No issue touching the federal interest is pre-

sented. The issue is narrow and not likely to recur. The

trust fund issue is strictly a matter of local law. See’

: __Collier-on Bankruptcy, Volume. 4, pages 1210-1211.

As to the power of the bankruptey court to award counsel

fees out of the fund, this matter had long ago been settled

by this Court in. Trustees v. Greenough, ioe S-587, 533,

when this Court said:

> “The fule that a party who recovers a fund for the :

~ - common benefit of creditors is entitled to have his costs

oe gre a a ea ca a ae

ruptcy cases.’” ;

oe 10

“And in Sprague'y. Ticonic Bank, 307 U.S. 161, 167, ‘hin :

.Court said: ea :

“Tn any event such tallowallice are appropiate aly in

| - exceptional cases'and for dominating reasons of jus- |

' tiee.. But here we are concerned solely with the ee

-to entertain’ agen dl mee wie pone uae ey Po ee |

'. New Jersey has also accepted the doctrine of Trustees ATS

Greenough, supra, See Babbitt v. eyes Trust = 72

N. J. Eq. 746, 66 A. moe _—

‘Any limitations that may exist on ‘the | power of the bank-

ruptey court-to~allow counsel fees are those imposed in

the-bankruptcy itself, and not in any. controversy in equity

- .arising out of the bankruptcy in which the bankruptcy

court will follow the precedents and practice of a court of

equity and allow counsel fees, referred to traditionally as .

Soa Gea x solicitor and client. Even the case of

Berry v. Root, 5\Cir., 148 F. 2d 945, cert. den. 326 U. 8.-755,

and others cited by. petitioner, and which did not involve a

fund before the Court, acknowledged the power.:to’ allow

counsel fees under circumstances present in this case. The

_ only reservation sometimes laced is the requirement, that:

the benefits be accepted bythe beneficiaries. However, as

demonstrated heretofore, steps.are under way’ (24) to

' give the other beneficiaries an sppertpalte: = shate'i in. -_

fund and to accept the benefits.

In any event, the petition should not be ae alaag: on

the question of counsel fees for the further” reason that

petitioner is: not an aggrieved party and therefore has no

standing to review the decision. allowing if? ‘Respondents.

' do not.seék any sum over and beyondsthe amount due the :

- unpaid claimants for counsel fees, but merely an allowance

out of the sums being paid to. each creditor, so that the

creditors who did not participate in this litigation are’ not

fe. unjustly enriched at the expense of the four claimants and

. their attorneys: ‘who instituted the > pecmnedin Wefarg!the

Oe BS pee eae

= =

| pA am 3 ee ie

_ Referee, petitioned the District Court for review and then .

-. appealed to and obtained a reversal-from the ,Court of

Appeals and are now opposing-certiorari before this Court...

In fairness and in equity, the experises and legal fees as

determined by the Distriet Court should be shared ratably~

- eut_of the fund. The petitioner will be unaffected by this ~ ;

__-relief.. The only ones affected by any allowance of counsel

fees would be the thirty-five other participants in the fund

against which the fees would be chargeable: | : :

It is well-settled ‘that an appellant cannot be heard to

| complain of an error which does not harm him. He must

be aggrieved by-the judgment or decree for which the

relief is sought. - It must prejudice, him in his rights or

adversely affect his legal interests, otherwise, he is not

entitled to appeal therefrom. Public Service Commission

v. Brashear Freight Lises, Inc., 306 U.:S. 204, 83 L. Ed.

608, rearg. den:, 306 U. S. 669, 83:L. Ed. 1063; Kirkpatrick

Wing & Export Co:, 125 F. 151; Marceau v.

v. Eastern M1

Great Lakes Transit Corp., 2 Cir., 146 F. 2d 416; Highway — .

Construction Co. of Ohio v. City of Miami, Fla.,.5 Cir., 126.

|B, 24 777; Cyclopedia of Federal Procedure, Volume 14,

The Court of Appeals did not decide any federal question .

in a way to conflict with applicable decisions of this Court,.

‘nor did it conflict with any guaranty of basic fairness

secured by the Constitution or implied in the nation’s laws

so as to call for the exercise of this Court’s power of ;

“supervision. In fact, the decision of the Court of Appeals

is in furtherance of this Court’s doctrines. See: Aqutimo

. ¥. United States of America, et al., 363 U. S. 509,80 S. Ct.

1277; Pearlman v. Reliance Insurarice Company, 371 U. 8. |

132, 135.*In the latter case, this Court said: ¢. nee

4¢Property interests in a fund not owned by a bankr

__ at-the time of the adjudication, whether complete or

. partial, legal or equitable, mortgages, liens, or simple —

_ priority of rights, are of course not 4 part of the

S

3%: | Pi

; ee er

bankrupt’s property. and do not vest in the trustee.

The Bankruptcy. Act simply does not authorize a

trustee to distribute other people’s property among a

bankrupt’s creditors. So here if the surety at the time *

of adjudication was, as it claimed, either the outright

legal or equitable owner of this fund, or had an equi-,

‘table lien or prior right to.it, this property interest of

the surety never became a part of the bankrupt estate

_. to be administered, liquidated and distributed to gen- -

eral creditors of the bankrupt.”” — | hos

Moreover, the Court of Appeals made it clear that the —

consequence of its decision would be: to guarantee basic .

fairness and to bring about the fulfillment of the New |

Jersey legislative intent that funds from a real property . _

improvement went to those who contributed to the im-. —

provement. — 1 + ae 408 a:

ft:

While the Supreme Court of New Jersey in State v.

Low, 18 N. J. 179 (1955), and the clear language of Sec-

tion 2A:102-11 of the New Jersey statutes describe the

- Monies received as “‘trust funds’’, the New Jersey courts

-+ have not ruled. squarely on the issue presented herein,

i.e., whether a bankruptcy court could impress a trust -

under New Jersey law in favor of job claimants on funds

. ‘in the possession.of a debtor derived from a New Jersey

_* However, as noted: before, clear expressions by the

highest and next highest courts of the State indicate that

civil relief would be afforded and formed the main basis

_ for the decision of the Court of Appeals. Reet

aan It should be noted that nothing more is sought herein:

than the precise application of the. statute ‘in favor of —

My =

oF

the statutory beneficidries and against the statutory trus- —

tee, without any complicated issue of tracing the res,

_ ereation’of a.constrictive trust against funds in the hands

of third parties, or the imposition of a civil remedy against

‘ someone other than the trustee. pe. rie ; -

The petitioner relies heavily on a lower court New

_ Jersey case, Plevy v. Schaedel, 44 N. J. Super. 450, 130

_ A. 2d 910 (Superior Court, Law Division, 1957), and the

_ Statutory interpretation. of the court in contrasting the —

| legislative treatment given by the State of New Jersey |

to public improvements as against privgte improvements. ©

Respondents contend this reliance ncga@s unwarranted for |

the following reasons: Hereee celle Paveitin

Gl) The Plevy case is clearly distinguishable from our 7

case in that Plevy involved a suit against officers of the -

corporate debtor-trustee for a diversion and not one against

the statutory trustee for an accounting; (2) The Supreme 3

Court of New Jersey, in its footnote reference to the pri-_

vate improvement statute in the Hiller ¢ Skogland v.

Atlantic Creosoting Co. Enc. case, supra, cited the case of

Samuel D. Wasserman Inc. v. Klahre, supra, as allowing

_» Givil liability under the statute, but did not cite Plevy,

the only other decision interpreting the statute and more -

recent in time than Wasserman; .(3) In the same footnote .

_ Feference, the court noted that a different legislator intro-_

duced the private improvement statute than the one who

introduced ‘the public improvement statute;:and (4) A .

_ Closer look at the public and private improvement statutes

_ , demonstrates that the differences in substance are nil; and .

they were treated differently only -because ofa different.

‘ approach by the two legislators introducing the respective —

Respondents contend that the Statements in the Hiller

« 4 ‘port for its view that civil remedies are available under

ad and honorable thing...”

and later, the Court- said: ,

14

o

. & Skogland opinion lend strength to this conviction and

demonstrate that as- between the parties, the beneficiaries

must prevail. ‘With: respect to the trust fund statute .

on: a public job, which should apply equally to a private

ys eee the Supreme Court of New J ersey: “said:

‘‘While it eannot be said that thetrust fund prescribes

@ full-blown trust relationship all the way down. the .

ladder with consequent+ effect upon strangers to the.

construction project, the underlying thought ‘is clear

that all those diréctly exvolved should do the —

co court should not hesitate to ‘translate that ‘lee

- lative conception into a,positive duty and to compel

the ‘appropriate use of payments where the payee

knows their source and obviously intended purpose

aa “for a court to do Yess would bé to. sanction sharp

practice—indeed immoral . conduct—in the business

community. That day should have long since. passed” |

a8 far as, the judiciary is ‘concerned. ””

~ Its endorsement: of the Wieborwign case, its failure to

cite Plevy v. Schaedel; its mention that different legislators

introduced the public improvement and private improve-

“ ment statutes, coupled with the: sweeping language of its

- decision. insofar as the public improvement statute was

concerned, make it evident that the Supreme: Court: of

’ New Jersey would. sanction the relief vitgoes bia the Conrt

of Appeals, |

‘The. court in the Plevy case cited poe cases in eee

of its decision, the Wasserman case, supra, and: Raymond |.

Concrete. Pile Co. v. Federation Bank & Trust Co., 288 N. Y.

452; 45 N. E. 2d 486, affd.'on reargument, 290 N. Y. 811,

48 N..E. 2d 709.- These cases likewise are distinguishable

_ int. that both involved efforts to impose constructive trusts

ee ¥

~

™

{bags X

15.

aN statute who lacked ioties of the trust. fand character of the

‘monies. In neither case was relief sought directly —— =

the statutory trustee.

In the Wasserman pre. a job deans who had acospted

_S checks from the debtor in release of a mechanie’s lien sought . _

to recover monies collécted by another creditor on a sheriff’s

’ execution against the debtor’s bank account. The court re- -

- fused ‘to impress ‘a trust against the execution creditor on

‘ the ground that such action was not authorized by: the

statute.

However, in adoalling the ‘trust beneficiary's claim, the

court nevertheless enunciated principles which support the

- relief sought herein, to wit, that criminal statutes do have:

incidental effects and civil remedies arising therefrom. The '

following are exce from the opinion: )

‘“We are satisfied that had Candrille . violiied: ‘the -

statute, the plaintiffs would have had whatever civil Me.

remedy might be- appropriate to the circumstances

under the general principles of law and equity but --

_ Candrille did not, violate the statute; the sheriff levied

on the fund without leave of Candrille.. .

‘‘The mingling of the fund with. other “monies in os

Candrille’s general bank account did not destroy

plaintiff’s interest in the funds . ,

. “*The interest that plaintiff mini had i in the account

was at most an undisclosed equitable lien .

Bot ‘New Jersey, there is no clear rule on és subject

- . . . We think that in*each case the facts must ‘be

is) analyzed to determine on broad principles whether the

‘judgment creditor or the lienor has the stronger

Claim . ves " (Emphasis added.) s

i parr ie reading of- the Wasserman’ case ‘indicates (1) :

that job claimants embraced within the statutory protection

have an interest in the fund as trust beneficiaries and (2)

fh » 5 ‘f

8 f ¥

- &

ea ~

Ly ae

ns sir ei eben tial tut.eurely not.

limited to a violation of the statute by the trustee, civil

remedies would be available (other than for goods sold and

delivered). An accounting by the trustee, either in a bank-

_ Tuptey, insolvency or estate proceeding, should likewise be

available as a logical outgrowth of the Wasserman decision.

It should be noted that in neither the Plevy, Wasserman |

nor Raymond Concrete cases did the courts sanction a mis- .

‘ appropriation of he gebtor’s trust funds by the debtor

itself.

_. A comparison of the public and private improvements

does not lead. to any contrary result. -

Tn the early part of 1932, three statutes were passed,

dealing with mortgagors, general coritractors and sub-con-

_ tractors respectively on private improvements, and with

changes not relevant herein, these laws are in effect today

as Sections 2A :102-9, 2A :102-10 and 2A:102-11. Later in

1932, a different legislator introduced two other separate

. statutes dealing with public improvements, and which are

now embodied in Sections 2A :44-148 and 2A :102-12.

Section 2A:102-11, the private improvement statute we .

are dealing with, provides as follows:

‘* All monies received by a subcontractor . . -, from a

contractor, for the purpose of having a building:

erected . ... are trust funds in the hands of the sub-

contractor to be applied to the amount of all claims

due or to become due and owing from the subcontrac-

tor to all persons furnishing ... . materials to him.

. . « Any subcontractor or any officer, director or

agent of the subcontractor, who pays or consents to

the appropriation of such funds for any ’other pur-

pose prior to the paymient of all claims and charges

for the payment of which the funds constitute a trast

fae aoa tn ealeneptener,”” (Emphasis, added.)

17 |

It should be noted that this section consists of two

_. sentences. The first sentence provides that all monies re-—

ceived by a subcontractor are trust funds in the hands of

the subcontractor to be applied to the amount of all ciauns ©

due or to become.due to materialmen and others. The sec-

ond sentence of the statute creates the criminal offense..::

Section 2A: :102-12, the public improvement statute,

differs from the private improvement statute but these .

differences favor respondents’ view herein. It provides

as follows:

‘* All monies paid by the hats . to any person .

for the making of any public improvement, shall con- -

| stitute a trust fund in the hands of such person as .

. contractor.. Any -such person who shall use any ,of

the moneys so received for .a'purpose other than the

, payment of claims for labor or material . . . is. easily

ay of a misdemeanor. id ene, added.) .

Thus; this statute is also i in two parts, but the first part |

ends with the establishment of the trust fund in the hands

of the contractor and does not contain any directions about

its application nor does it name any beneficiaries. The sec-

ond sentence simply creates the erimsioal offense for misuse |

of the fund. — |

Section 2A :44.148, also dealing with. public improve-

ments, starts> ff by repeating substantially the same lan-

guage as a rs in the first part of 2A :102-12 (the criminal |

- statute) but then continues with an ae. clause, as

follows: :

. *All monies paid by the State of New Jersey eee

shall constitute a trust, fund in the hands of such

person as such contractor until all claims for labor, -

hep iat) enoteed eee (Emphasis

pee sa .

18

Tt is. apparent, that the tneialator; in 5 the ease of the

public: improvement. statutes, wished to separate the civil

from the criminal and accomplished that objective by han-

. dling the ‘application of the trust funds in a separate statute.

In the“case'of the private improvement statutes, the civil — -

and criminal provisions were handled together and the first

sentence of those statutes embodies all the elements of a

trust, i.e., a trustee, a fund, directions as to its use and

" specified beneficiaries,

The public improvement ociesinal statute (2A. :102-12)

is obviously only criminal because the clause creating the

trust ends without stating its purpose ‘or providing for its

application, and logically so, for the disposition of the trust

fund is dealt with in 2A:44-148, where the legislator re-

stated, the creation of the trust but added the words ‘‘until

all claims for labor, matéfials’. . . shall have been fully

paid’, In contrast, substantially ‘the same words were al-

_ ready: contained in the private improvement statute, Sec-

, tion 2A :102-11 which provided that ‘‘All monies . . . are

trust funds in the hands of a subcontractor to be applied

to the amount of all claims ... due. ..fromthe subcon-

tractor to all Persons furnishing . . materials . We

- Respondents therefore submit that a closer examination

of the New Jersey statutes draws one to the conclusion that

no inference can be drawn by any different legislative

_ treatment, except an inference favorable to the respondents,

to wit, that both groups of statutes created civil, remedies,

but in different ways, only because the legislator on the

. public improvement statute merely desired more clarity ‘

and an orderly separation of. the civil from the criminal

provisions.

Tf the law of New pao is to be 5 Waal et by a choice ef

between the lower court decision of Plevy or the Appellate

_ . Division decision of Wasserman, it is clear that Wasser-

man, especially in the light of its approval by the Supreme

Court ‘of New Jersey ii in the Hiller & a case, is

19. -

@ more authoritative exposition of New J ersey law ‘than :

_ Plevy. And the Wasserman case clearly keeps the ‘door

open for civil remedies under the statute. —

In any event, neither the Wasserman nor the Plevy case

is clearcut authority for the factual situation involved

~ herein—a conflict between job claimants on the one hand

_and the debtor and, indirectly, its unsecured creditors on

the other hand. On this conflict, there are no New J ersey ~

casés directly in point. It is submitted, therefore, that the

Court of Appeals was. free to determine what the highest

court of the state would rule in a similar case. :

- .. ‘Phe other case cited in the Plevy case, Raymond. Conerete

. Piling Co. v. Federation Bank & Trust Co., supra, also

involved rights of a third party under a comparable New

York criminal statute, but the dicta in that case which

geemed to.deny a civil remedy was later disapproved by

the New York Court: of Appeals in the case of 4aerinn i

eee 10 N.Y. 2d 271, 276, when it said: —-

. This holding, distinguished’ from the dicta in

has case, clearly supports the view that,a 36-0 con-

tractor-trustee holds the funds he receives as trustee,

rather than as owner, until he has paid the claims

, Of all the statutory beneficiaries.’’

Whee axe 'thises' eliag tn! tin’ Wideral, déuicte “ids “ait

squarely in point, and while they involve application of

the law ‘of New York, the statute then involved, Section

36-a of the Lien Law, was similar to the present. New

Jersey statute, i.e., it was on its face criminal in impact,

_ and yet, the Federal Courts did not hesitate to impress.

a trust when the fund was in the possession of the bankrupt

or debtor. Albert Pick Co..v. Travis, 6 F. Supp. 486

(E, D; N. Y. 1933); In re Heintzelman Const. Co., 34

F, ‘Supp.- -109 (W. D. N. ¥. 1940) ; Wickes Boiler Co. ‘Ine.

v. Godfrey:Keeler, Inc, .2.Cir., 116 F. 2d sp _ 121 .

F, 24.415; cert. den. 314 U. 5 686... om

inca Ania citar iiasit ean tninieatitigpaeed

- “Contractor - who diverts funds. guilty of larceny’’.

The Court, in Albert Pick Co. v. ‘Travis, supra, held that

the funds in the hands of the contractor were trust funds

under the New York criminal statute and so aptly said: |

' The intention of the Legislature of the State of New

York was tq protect sub-contractors, materialmen —

and laborers-contractors cannot ‘avoid their responsi-

. bilities by making preferential payments out of trust

' funds and then filing petitions in bankruptcy or hav-

ing involuntary petitions filed against them. To. fol-

low the trustee’s contention that the funds. should

be distributed among all the creditors would’ nullify

the very purpose of the statute, which was to distrib-

ute the specific fund to a preferred class of creditors.

There would be no purpose for the lien law. were it - .

not that the State intended to protect the very. class _

that the statute outlined. If the contractor attempts

to deprive the lienors of their rights, the court should

restrain and not help facilitate the srolianre of law-

‘fal obligations.” = |

The case of Wickes Boiler 00.-Ié v. Godfrey Keeler,

_ Inc., supra, is even more authoritative because it involved.

an application to a Referee in a Chapter XI bankruptcy

proceeding for an order similar to the one herein, except

that the petitioners there sought to impress a ‘trust on

@ receivable and not on monies in the debtor’s bank

account. The Wickes Boiler case dealt with the same crimi-

nal statute as in the Albert Pick Co. v. Travis case, and

the debtor likewise sought to use the monies to consummate

a settlement with its creditors. The Circuit Court of Ap-

peals sustained the Referee in impressing a trust.

Several other rélated cases support the respondents’

view. Maull v. Stokes, 31 Del. Ch. 188 (1949); Estate of

Liebman, 189 Mise. 282, 60.N. Y. 8. 2d 482; In Re Korn-

der’s Estate, 168 Misc. 553, 6 N. Y. 8. 2d 324.

:

21

J th any: ert Come ae Wink slats tat

is a crimizal one, it should be strictly: construed. ‘While

this is a general rule of construction, it is also firmly

established that where a statute is both remedial and penal, :

the remedial part will be liberally construed and the penal — ;

- part strictly construed. Respondents are not attem

to penalize or imprison the debtor; they are.

to recover monies which the legislature ‘intended them to

| Teceive. See State v. Meinken, 10 N. J. 348 (1952) ; Filardo

‘v. Foley- Bros. Inc., swpra. Moreover, appellants contend

that \the statute is so clear that it calls for little or no con-

. retin as between the sub-contractor and the material-

, The remedies cited by the petitioner as being available

. under the laws of New Jersey dealing with mechanic’s

liens and ‘‘stop notices’’ are only concerned with tying up

monies in the hands of the owner of the réal property

improvement, whereas the trust fund statutes are designed

to insure that/tonies in the hands ‘of a contractor or

sub-contractor are paid over to materialmen and other

sub-contractors. And while the Appellate Court in the

Wasserman case did mention the fact that a lien could

have been filed in weighing the equities of the parties, the

court there was fot dealing with a controversy between

the trustee and the beneficiaries, but: between the bene-

ficiaries and # third party, nor did the court in the Wasser-

mam case hold that filing of a lien or ‘‘stop notice’? was

@ condition precedent in order to receive ‘‘whatever civil. -

remedy might be appropriate_under the cireumstances,”’

Cf. Wickes Bower Co., Inc. v. Godfrey-Keeler, Inc., supra.

A trust was properly impressed on equitable principles.

It is elementary that a Court of bankruptcy is also a Court

‘of equity, and in ‘view of all the facts and circumstances :

in this matter, the Court of Appeals'was correct in afford-

ing relief herein on genéral principles of equity and justice.

Clews v. Jamieson, 182 U. S, 461 (1901);:1. Pomeroy on

sprint resaerterasers

?

.

-

The record reveals quite clearly that the petitioner. made

no excuse for its attempt to prefer a small group of job

creditors to the exclusion of and without notice to thirty-

five others. The circumstances show that the petitioner —

was aware of trust fund claims (16a). .When its payments

to the select few were revealed, it made an about-face and

denied any trust fund obligations (17a).

If the petitioner is} ‘allowed to use trust funds in this

‘manner, then surely it would be a simple matter for any

contractor to misappropriate construction funds with com-

_ plete.immunity by merely receiving all funds on a New -

Jersey job.in the State of New York. The contractor would

thereby: thwart the New Jersey criminal statute and be free

of any trust fund obligations, or the contractor could simply

hold the monies in’a New. Jersey bank account indefinitely,

file.a Chapter XT petition, with no consequences to it for

not ; paying out to its job creditors. |

Surely a Federal Court, under. principles. of a,

‘should not permit a debtor to violate the New J ersey stat-

ute and frustrate the intent of the New J ersey legislature.

Such interpretation of the legislative intent should not be

made by any ies no less a court of prhiahied and

=

The Court of . Appeals aise relied on numerous Ne ew

Jersey cases which hold that where a fund is created for

a special purpose even though it does not fall within the

confines of the: ‘statutory trust, a trust will be impressed

under general equity principles. National Surety Corp. v.

Barth, 11 N. J. 506 (1953); Morris Picker v. City of

Bayonne, et ali, 60 N. J. Super. 251; Wilson v. Robert

- A, Stretch, Inc., 44 N. J. Super. 52, 58; Stule-Sickles Co.

Uv. Fiedburn Const. Corp., 114 N. J. Eq. 475. 3

It would seem immaterial that the foregoing cases in- ‘

volved the’ public improvement statutes, and the Court

of ‘Appeals correctly used all the equitablé principles at

its command, such as aon iat @ person to avoid

DS SE OL ARI SAIS Be em eee és coe

8B

_ responsibility hy violating's stibiat. entonytl hada equity -

to do what should be done, applying a fund for its intended

use when the fund is under the control of a court and

other. principles of law and justice, in order to grant the

. relief prayed for herein: See Filardo v. Foley Bros., swpra...

‘If the. petitioner i is to prevail i in this case, would it not

be tantamount to holding that the very ones whom the law

was intended to protect were helpless to secure, that .pro-_

tection, and, even in. New J ersey, that the petitioner would

_ be immune from criminal prosecution so. long as it retained —

possession of the fund indefinitely, or, as in this: case, re-

ceived the funds outside of the State of New Jersey and

. would be free to divert same in or out of a bankruptcy

Court? Respondents do not believe that this Court will

countenance such a result, or that the case is the kind of

case warranting the exercise of —_. Court’s discretionary

- Teview.

‘Under -the strict. tests for discretionary review, there

' . moust be an actual conflict with applicable local law deci-.

sions. See Weiner, 68 Harvard Law Review 20, 61. Such

conflict is not present'in this case. To the contrary, the

decision of the Court of Appa is in wracns with New.

Jersey law.

_ CONCLUSION

: For the foregoing reasons it is respectfully submitted

_ that this petition for'a writ of certiorari should “be

denied. |

ie ‘Respeotflly submitted, ae cab

Attorney for Reapendanen:

~~ - 120Broadway,

: Tai gee Sperohsa oe 10005.

_ Sonw 2,, WEISSBERGER, Latcnrer & ames ory

ni STorcH, . | SS esa

Of Counsel.

;

vient

——

co

APPENDIX

UNITED ) eins DISTRICT COURT, .

; Easrean Disraor o New York.

‘No. 62-B.934

In the Matter _

5 a

_. JE. Scnecren Corporation,

peer: >

‘Wis petitioners Cation Carpotation, Americas Radiator -

_ & Standard Sanitary Corporation, Sarco Company, Inc.

_ and Sarcotherm Controls, Inc. having appealed to the.

‘United States Circuit Court of Appeals for the Second

Circuit from an order of the Hon.’Leo J. Rayfiel, one of

the Judges of this Court, entered in this proceeding on

the 17th day of November, 1964, which denied a petition

for review of an order of The Honorable William J. Rudin, __

Referee in Bankruptcy, dated the 20th day. of July, 1964,

' .to the extent that the petition sought to impress a trust

on funds in the possession of the debtor, and to recover

counsel feés out of said funds, but, which granted the peti-

.tion for review to the extent that the matter was remanded

to the Referee for the purpose of directing the debtor to |

proceed with an appropriate motion to recover funds paid

_ to six creditors pursuant to a prior order of the Referee

dated July 23, 1963, and said Circuit Court of Appeals

having issued its order dated the 2ist day of May, 1965,

and its mandate dated the 11th day of June, 1965 having

been transmitted to-and received by the Clerk of this Court

j

SORES Ta eee [eee ene ne nee — —

— “ —

on the 14th “day of June, 1965, wherein it was. ordered,

adjudged and decreed that such order of the District Court

be reversed, with costs assessed at $282.66 in favor of -

~ petitioners-appellants, and that the matter be remanded to

the District Court'for furthef proceedings im accordance

with the opinion of the Court wherein it was held that the

District Court erred in not impressing a trust‘on the funds -

. im question and directed that counsel fees be awarded out

of ‘said funds as determined by the District Court, and that

the alternative relief of directing the recovery of funds paid

‘Now, upon the aforesaid order, mandate and opinion of

the United States Circuit Court of Appeals for the Second

. Onpezep, Apsupczp and Dzcneep that the sum of $92,-

316.87 and any additions or accretions thereto paid by.

William L. Crow Construction Company to the debtor on

account of the real property improvement known as ‘‘En-

gineering Quadrangle”’ at Princeton University, Princeton,

New Jersey, pursuant to the order of this Court dated

_- Suly 23, 1963, constitute and are trust funds in the hands of

said debtor to: be applied first to the payment of unpeid

Claims of all persons furnishing labor and materials to -

_ J. E. Schecter Corporation for the erection, construction.

and completion of said improvement or. any alteration, re-

, pair or addition thereto, and any other reasonable and

necessary, charges in connection therewith, and it is

Schecter Corporation is liable to the petitioner Carrier -

‘Corporation, in the sum of $9,029.50 with interest from : |

July 30, 1963, for materials furnished in connection with

such improvement, and the said petitioner Carrier Cor-

"poration is entitled to share in such trast funds in the

amount and axtent as. aforésaid and J..E. Schecter Cor---

. poration is liable to petitioner American Radiator & Stand-

ard Sanitary Corporation in the sum of $2,610.00, with

interest from July 30,.1963, for materials furnished. in

_connection with such improvement, and the said petitioner

American Radiator & Standard Sanitary Corporation ‘is

entitled to share in such trust funds in the amount and

‘extent as aforesaid and J. E. Schecter Corporation . is

... liable te Sarco Company, Inc. in the sum of $363.45 with —

interest from July 30, 1963, for materials furnished in

‘connection with such improvement, and the said petitioner

- Sarco Company, Inc. is entitled to share in such trust

funds in: the amount and extent as aforesaid and_J.: E.

Schecter Corporation is-liable to, Sarcotherm Controls,

Inc. in the sum of $176.64 with interest from July 30,

1963 for materials furnished in connection with such im-

‘provement, and the said petitioner Sarcotherm Controls,

Ine. is entitled°to share in such trust funds in the amount

. and/extent as aforesaid, and it is .6

ForTHer;: Orperep that’ all other persons icine claims

for labor. or matérials furnished to J. E. Schecter Cor-

poration in connection with the aforesaid improvement,

__-and’any other reasonable’ and necessary’. charge in con-

nection therewith, be .given notice by the attorneys for

the petitioners to file verified claims -with the attorneys

'* -for the petitioners on or before. September 15, 1965, and

on default. to be forever barred from ‘making any claim

_-to ‘said trust fund, said notice to be ‘accompanied by a

+3

ng?

“7

copy of this order, and it is

FURTHER, ‘Ornperep that the debtor furnish ‘to the “A:

' torneys for petitioners-a certified list of the unpaid claims

against such trust fund, setting forth its best available

. information ofthe full name and address of each claiin-

ant and the amount of its respective claim, within ten days

after service of a copy. of this. —e and it is © Q

. Appendix.

Paxtum: Cees that petitioners shall serve said notice |

_ to file claims and a copy of this order upon each of said

claimants by certified mail, return receipt requested, and

itis

_ Forraer, Orperep that the silicntae notice be published

- once in the Long Island Daily Press, a newspaper pub-

lished in the County of Queens, State of New York, ‘and_

once in the Princeton’ Herald, a newspaper published in

Princeton, the County of Mercer, State of New Jersey:

“UNITED STATES DISTRICT COURT _

Eastern Distaicr OF New York -

No. 62-B-934 ee

In the Matter

* —of—.

J. E. Scuecrer Corporation,

| Debtor,

cd

To:

All persons who have furnished labor or materials to

J. E. Schecter Corporation for the erection, construc-

tion and completion of the Engineering Quadrangle .

at Princeton University, ceton, New Jersey, or

| > any alteration, repair - or addition thereto and any

other reasonable and necessary ree in connection

therewith -

PLEASE TAKE NOTICE that an pre has et entered

in the United States District Court for the Eastern

‘District of New York impressing a trust on funds

in the possession of J. E. Schecter Corporation, debtor,

obtained from William L. Crow Construction Company

and arising out of an improvement in the State of

New Jersey known as the “Engineering re: |

and itis :

Fonraes, Onpzzen that counsel fees shall bé paid to

| 8B

. Appendic.

Princeton University, Princeton, New Jersey, “ be

applied to the payment of claims of all persons who

have furnished labor or materials to J. E. Schecter

Corporation for the erection, construction or comple-

tion of said improvement or any alterations, repairs

or additions thereto, and any other reasonable or

‘necessary charges in connection therewith, and pro-

eS See tt Se Se ee ee Oe

to the attorneys for the petitioners, and

PLEASE TAKE FURTHER Notice that you are hereby

required to present your verified claim to the office of

William J. Rudin, Referee in Bankruptcy, 195 Willis

Avenue, Mineola, New York no later than the 15th

day of September, 1965,-and in default thereof you

will be barred from making any claim to said trust

fund or any part thereof,

Scuwartz, Weisssercer & LEICHTER

Attorneys for Petitioners

141 Broadway

New York, N. Y. 10006’’

Schwartz, Weissberger & Leichter, attorneys for the peti-

__. tioners, out of said trust funds in an amount to be deter-

mined ‘pursuant to a further order of this Court on ap-

plication by said attorneys at such time as they deem it

appropriate and in conjunction with the order of distribu-

tion of the trust funds to the beneficiaries thereof at which

time a judgment for costs shall be entered in favor of

petitioners in a sum to be taxed by the Clerk of this

Court.

~ Dated: Mineola, N. Y., July 29, 1965.

. Wuius J. Rov,

Referee in Bankruptcy.